Kent Ro Systems Ltd. & Anr vs Rajat Bansal & Anr on 11 July, 2022

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Delhi High Court - Orders

Kent Ro Systems Ltd. & Anr vs Rajat Bansal & Anr on 11 July, 2022

1. This is an application filed by the applicants/defendants praying for leave to file additional documents on record. In the application, it is alleged that the documents now sought to be filed on record came to the knowledge of the applicants/defendants only when the counsel for the applicants/defendants stumbled upon the judgement in M/s Crocs Inc. USA vs. Bata India Ltd & Ors., (2019) 78 PTC 1 and became aware of the "WayBack Machine" website that provides for screenshots of web pages which could be searched for on the web archive. The learned counsel for the applicants/defendants thereafter searched the said website with regard to the prior publication of water purifiers with "novel" features as have been claimed by the non-applicants/plaintiffs in respect of its four registered design Nos. 262661, 219309, 252225 and 216875. The Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:12.07.2022 18:08:18 applicants/defendants claim that the documents now sought to be placed on record are a result of the said search. The applicants/defendants further claim that the applicants/defendants made similar searches on Google Images and came across further postings on https://www.google.com/imghp?hl=EN and the Design Search option using the www.ipindiaservices.gov.in website. The applicants/defendants have sought permission to place on record the computer printouts of the web pages and web page results of its search.

2. The learned counsel for the applicants/defendants submits that the said documents were not in the power, possession, control or custody of the applicants/defendants when the written statement was filed. The applicants/defendants became aware of these documents only later and immediately filed the application in question. Placing reliance on the judgment of this Court in Hassad Food Company Q.S.C. and Ors. vs. Bank of India and Ors., MANU/DE/3385/2019, she submits that in terms of Order XI Rule 1(10) of the Code of Civil Procedure, 1908 ("CPC") as applicable to the commercial disputes of a specified value, such documents can be filed with the leave of the Court upon the applicants/defendants establishing „reasonable cause‟ for non disclosure of the same alongwith the written statement. For determining „reasonable cause‟, a lower degree of proof as compared to „sufficient cause‟ is required to be established. She further places reliance on the judgment of this Court in Nitin Gupta vs. Texmaco Infrastructure and Holding Limited, MANU/DE/1554/2019 to submit that as the documents now sought to be placed on record are not contrary or inconsistent with the pleaded case of the applicants/defendants, they can be taken on record.

Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:12.07.2022 18:08:18

3. Placing reliance on the judgment of the Supreme Court in Sudhir Kumar @ S. Baliyan vs. Vinay Kumar G.B., 2021 SCC OnLine SC 734, she submits that as these documents were not in the power, possession, control or custody of the applicant/defendants and had been discovered subsequently, provisions of Order XI Rule 1(7) of the CPC shall not be applicable.

4. On the other hand, the learned counsel for the non-

applicants/plaintiffs submits that the present application is liable to be dismissed inasmuch as the issues in the suit were framed by the Court vide its order dated 30.01.2020. Thereafter, the plaintiffs have already filed its list of witnesses as also the affidavit of its witnesses. She submits that at this belated stage, allowing the application of the applicants/defendants would lead to the reopening of the trial and cause unwarranted delay in the adjudication of the suit.

5. She further submits that apart from taking a vague plea of the designs in which the plaintiffs are claiming a right being not noval, no basis for taking such defence was given by the applicants/defendants in their written statement. She submits that the applicants/defendants cannot be allowed to improve upon their case by filing the additional documents at a belated stage as this would prejudice the non-applicants/plaintiffs.

6. She further submits that the applicants/defendants have chosen to challenge the validity of the design registration of the plaintiffs before the Registrar of Designs. Having chosen a remedy, in any case, the question of validity of the design registration is not an issue to be considered by this Court and, therefore, the documents which are now sought to be placed on record are not relevant.

Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:12.07.2022 18:08:18

7. Placing reliance on the order dated 09.03.2021 of this Court passed in CS (COMM) 84/2019 titled Kent RO Systems Ltd. & Anr. Vs. Jaideep Kishnani & Ors., she submits that in similar circumstances where the defendants therein had sought to place same documents on record making similar averments in its application, this Court had rejected the said application.

8. She further submits that it is for the defendants to „establish‟ a reasonable cause for non disclosure of the documents alongwith the written statement. The applicants/defendants in the present case have failed to discharge that burden. Placing reliance on the judgment of this Court in Zee Entertainment Enterprises Ltd vs. Saregama India Ltd., 2019 SCC OnLine Del 10215, she submits that under the Commercial Courts Act, 2015, there is an additional onus placed on the defendants to show a reasonable cause while seeking leave to file additional documents at a later stage. She reiterates that in the present case, the applicants/defendants have clearly failed to discharge the said burden.

9. I have considered the submissions made by the learned counsels for the parties. Order XI Rule 1(7) of the CPC as applicable to commercial disputes reads as under:-

Order XI Rule 1(7) ―(7) The defendant shall file a list of all documents and photocopies of all documents, in its power, possession, control or custody, pertaining to the suit, along with the written statement or with its counterclaim if any, including--

(a) the documents referred to and relied on by the defendant in the written statement;

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                                          (b)    the documents relating to any matter in
                                               question in the proceeding in the power,
                                               possession, control or custody of the
                                               defendant, irrespective of whether the
                                               same is in support of or adverse to the
                                               defendant's defence;
                                         (c)   nothing in this Rule shall apply to
                                               documents produced by the defendants
                                               and relevant only--
                                               (i)    for the cross-examination of the
                                                      plaintiff's witnesses,
                                               (ii)    in answer to any case set up by
                                                      the plaintiff subsequent to the
                                                      filing of the plaint, or
                                               (iii) handed over to a witness merely
                                                      to refresh his memory.‖
                                                                      (Emphasis supplied)

10. A reading of the above provision would show that the applicants/defendants have to file alongwith its written statement, a list of all documents and photocopy(ies) of all documents which are „in its power, possession, control or custody‟. A declaration in this regard is also to be made on oath in terms of Order XI Rule 1(9) of the CPC, which reads as under:-

―(9) The written statement or counter-claim shall contain a declaration on oath made by the deponent that all documents in the power, possession, control or custody of the defendant, save and except for those set out in sub-rule (7) (c) (iii) pertaining to the facts and circumstances of the proceedings initiated by the plaintiff or in the counter- claim, have been disclosed and copies thereof annexed with the written statement or counter-claim and that the defendant does not Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:12.07.2022 18:08:18 have in its power, possession, control or custody, any other documents.‖ (Emphasis supplied)

11. In terms of Order XI Rule 1(10) of the CPC, the applicants/defendants shall not be allowed to rely on documents, „which were in defendant‟s power, possession, control or custody and not disclosed alongwith the written statement or a counter claim, save and accept by leave of the Court.

Such leave of Court shall be granted only upon the applicants/defendants establishing a reasonable cause for non disclosure of such documents alongwith the written statements.

12. The Supreme Court in Sudhir Kumar @ S. Baliyan (supra) considered the scheme of Order XI of the Code of Civil Procedure as applicable to the commercial disputes and in relation to the documents filed by the plaintiff, and has held as under:-

―Therefore, the declaration on oath shall be part of the plaint. The Plaintiff has to declare on oath that all documents in its/his power, possession, control or custody, pertaining to the facts and circumstances of the proceedings, initiated by him/it have been disclosed and the copies thereof annexed with the plaint, and that he does not have any other documents in his power, possession, control or custody. Therefore as such it is mandated by Order XI Rule 1 for the Plaintiff to disclose and produce all the documents in his power, possession, control or custody, pertaining to the facts and circumstances of the proceedings.

7.4 However, the additional documents can be permitted to be bought on record with the leave of the court as provided in Order XI Rule 1 (4). Order XI Rule 1 (4) provides that in case of urgent filings, the Plaintiff may seek leave to rely on additional documents as part of the above declaration on oath [as provided Under Order 11 Rule 1 (3)] and subject to grant of such leave by Court, the Plaintiff shall file Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:12.07.2022 18:08:18 such additional documents in Court, within thirty days of filing the suit, along with a declaration on oath that the Plaintiff has produced all documents in its power, possession, control or custody, pertaining to the facts and circumstances of the proceedings initiated by the Plaintiff and that the Plaintiff does not have any other documents, in its power, possession, control or custody.

7.5 Order XI Rule 1 (5) further provides that the Plaintiff shall not be allowed to rely on documents, which were in the Plaintiff's power, possession, control or custody and not disclosed along with plaint or within the extended period set out above, save and except by leave of Court and such leave shall be granted only upon the Plaintiff establishing reasonable cause for non disclosure along with the plaint. Therefore on combined reading of Order XI Rule 1 (4) read with Order XI Rule 1 (5), it emerges that (i) in case of urgent filings the Plaintiff may seek leave to rely on additional documents; (ii) within thirty days of filing of the suit; (iii) making out a reasonable cause for non disclosure along with plaint.

7.6 Therefore a further thirty days time is provided to the Plaintiff to place on record or file such additional documents in court and a declaration on oath is required to be filed by the Plaintiff as was required as per Order XI Rule 1 (3) if for any reasonable cause for non disclosure along with the plaint, the documents, which were in the Plaintiff's power, possession, control or custody and not disclosed along with plaint. Therefore Plaintiff has to satisfy and establish a reasonable cause for non disclosure along with plaint. However, at the same time, the requirement of establishing the reasonable cause for non disclosure of the documents along with the plaint shall not be applicable if it is averred and it is the case of the Plaintiff that those documents have been found subsequently and in fact were not in the Plaintiff's power, possession, control or custody at the time when the plaint was filed. Therefore Order XI Rule 1 (4) and Order XI Rule 1 (5) applicable to the commercial suit shall be applicable only with respect to the documents which were in Plaintiff's power, possession, control or custody and not Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:12.07.2022 18:08:18 disclosed along with plaint. Therefore, the rigour of establishing the reasonable cause in non disclosure along with plaint may not arise in the case where the additional documents sought to be produced/relied upon are discovered subsequent to the filing of the plaint.‖ (Emphasis supplied)

13. The above ratio is equally applicable to the filing of the documents by the defendant in a suit. A reading of the above would show that the requirement of establishing a reasonable cause for non-disclosure of the documents alongwith the written statement shall not be applicable if it is averred and it is the case of the applicants/defendants that those documents have been found subsequently and were not in its power, possession, control or custody at the time when the written statement was filed. Similar is the averment of the applicants/defendants in the present case. It is also not the case of the non-applicants/plaintiffs that the documents now sought to be placed on record by the applicants/defendants were in the power, possession, control or custody of the applicants/defendants at the time of filing of their written statement.

14. Even otherwise, as held by this Court in Hassad Food Company (supra), the phrase „reasonable cause‟ would require even a lower degree of proof as compared to „good cause‟, which is even lower in degree of proof required where legislature uses the phrase „sufficient cause‟. For judging whether the defendant has been able to make out a „reasonable cause‟ for non-filing of the documents at an earlier stage, it would therefore, be need to be seen whether these documents were in the power, possession, control or custody of the defendant and the defendant without reasonable cause failed Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:12.07.2022 18:08:18 to file the same. Where the defendant states and it is not denied by the plaintiff that the documents were not in the power, possession, control or custody of the defendants, it has to be held that the applicants/defendants have been able to establish „reasonable cause‟ for non production of such documents alongwith the written statement.

15. As far as the submission of the learned counsel for the non- applicants/plaintiffs regarding delay in filing of the application, the learned counsel for the applicants/defendants had submitted that the application was filed immediately after framing of the issues and on 11.05.2020, once these documents were discovered by the defendants. By then, the plaintiffs had not filed their list of witnesses or affidavit of evidence. The application, however, was not listed because of the outbreak of Covid-19 pandemic and, subsequently by an order dated 03.02.2021 passed by the learned Joint Registrar (Judicial), liberty was granted to the defendants to re-file the said application. The application was thereafter re-filed on 11.02.2021. The above sequence is not denied by the learned counsel for the plaintiffs. Clearly, therefore, the present application has been filed prior to the plaintiffs filing their list of witnesses or affidavit in evidence. As noted hereinabove, it is also not the case of the plaintiffs that these documents were otherwise in power, possession, control or custody of the defendant prior to their filing of the application on 11.05.2020. The submission of delay therefore, has no merit.

16. As far as the submission of vagueness of plea of lack of novelty in the designs in the written statement filed by the applicants/defendants is concerned, I may only note that this Court framed issues in the suit vide its order dated 30.01.2020 as under:-

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"1. Whether the defendants have infringed the plaintiffs' registered Design Nos.262661, 252225, 261875 and 219309? OPP

2. Whether the Design Nos.262661, 252225, 261875 and 219309 of the plaintiffs are not new and original and hence not registerable under Designs Act, 2000? OPD

3. Whether Design No.262661 registered in favour of the plaintiffs has been previously published in India? OPD

4. Whether Design No.262661 registered in favour of the plaintiffs has been published in India prior to the date of registration, i.e., 19.05.2014? OPD

5. Whether the plaintiffs are entitled for a decree for permanent injunction against the defendants as prayed for? OPP

6. Whether the plaintiffs are entitled for a decree of rendition of accounts earned by the defendants as claimed? If so, for what period? OPP

7. Costs.

8. Relief"

(Emphasis supplied)

17. In fact, the learned counsel for the plaintiffs have themselves brought to my notice the documents which were placed on record by the defendants in support of their plea of the design of the plaintiffs not being „novel‟. The applicants/defendants are only trying now to bring on record further documents in support of that plea. Distinction has to be made between the pleadings and evidence in support of such pleading. The very fact that issues were framed with respect to the plaintiffs design not being novel shows that the Court was satisfied with the pleadings of the applicants/defendants in that regard. The said order remains unchallenged. It is, therefore, too late in the day for the plaintiffs to now assert that the lack of novelty of its design is not in challenge in the suit, whether for lack of pleadings or for the defendants having challenged the same before the Controller of Designs.

Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:12.07.2022 18:08:18

The effect of the pleadings and the filing of cancellation application by the defendants shall be considered by the court after the parties lead their respective evidence.

18. As far as the reliance of the plaintiffs on the order dated 09.03.2021 passed in Kent RO Systems Ltd. (supra), I find that the Court in the said case found that by the time the application therein had been filed, the plaintiffs have already filed their evidence by way of affidavit and great prejudice would be caused to the plaintiffs if the application was allowed and fresh evidence is permitted to be taken on record. As noted hereinabove, in the present case, the plaintiffs were yet to file their affidavit of evidence when the application was filed. It was only due to outbreak of Covid-19 pandemic that the said application did not come on record and thereafter permission was granted to the applicants/defendants to re-file the said application.

19. As far as the judgment of this Court in Zee Entertainment Ltd. (supra) is concerned, as rightly held therein, the requirement in a commercial suit of declaration on oath qua the documents is not an empty formality. It rules out scope of any inadvertent error. However, the said judgment has not considered a case where the documents were alleged not to be in power, possession, control or custody of the defendants. The said judgment would, therefore, have not application to the facts of the present case.

20. In view of the above, the application is allowed and leave is granted to the applicants/defendants to place on record the documents mentioned in the application. In case the plaintiffs wish to file any documents in rebuttal of these documents, the plaintiffs shall be at liberty to do the same within four Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:12.07.2022 18:08:18 weeks from today. They shall also file an affidavit of admission/denial of these documents within four weeks. They shall also be allowed to amend/file fresh affidavit of evidence of its witnesses in case they so desire within eight weeks from today.

21. The application is allowed in the above terms.

CS(COMM) 83/2019 & I.A. 13262/2019 List the suit before the Joint Registrar (Judicial) for further proceedings on 26th September, 2022.

NAVIN CHAWLA, J JULY 11, 2022/rv/Ais Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:12.07.2022 18:08:18

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Delhi High Court - Orders